The very first myth about trading in Forex — Forex is a fraud. Those who could not achieve anything in this field due to various reasons invented this deepest error and to justify their laziness, inexperience, etc. hung this label. The fact that 90% of beginners do lose their deposit (in most cases through their own fault) does not mean that Forex can not bring the money. The currency market has existed, exists and will exist, and therefore the most persistent and determined will profit.
The most famous myths about Forex
Forex trading has a lot in common with classical entrepreneurship. There is also a need to understand what, how and at what moment is advantageous to sell or buy, you need to be a good balanced psychologist, the profit depends only on you. And now about the myths.
The more the trader trades, the more he gets profit
This statement can be called true only partially or can be interpreted somewhat differently: the one who spends most time in trade, earns more. Forex beginners seem to be a constant opening and closing of the transactions. In practice, a profitable trade can be opened only 1-4 times throughout the day, and the rest of the time will be finding good points to enter. Some traders prefer trading just 30 minutes a day on the news (scalping), managing to capitalize on market volatility. There are altogether unsuccessful days in which entrance to the market is contraindicated.
Important: existing strategies, which are hundreds, if not thousands, can be profitable only upon the occurrence of certain events, and only for the particular tool. There is no single strategy that can be used all day on one currency pair and still make a profit. Because most of the time is spent not so much on trade as on searching of strategies, and honing on a demo account.
Professional trader prefers to enter the market once, but for a long time, as frequent opening and closing of the deals — a loss on commission and spreads.
Take profit order should be 2 times bigger than stop loss
The emergence of this myth about Forex trading provided trade with the trend and opinions of the eminent traders. On the one hand, it is insurance and the best option of tactics of risk management, but why blindly follow the rules? General rules are created for that inexperienced traders not to lose everything at once. But after a clear understanding of why the rule is necessary and how to work with it, maybe makes sense to break it?
Tip: start trading in accordance with the generally accepted rules, and then change them. Develop your own trading strategy, test it on a demo account, make adjustments according to the situation. Be flexible, improvise, do not forget to test ideas on a demo account!
If the orders are poorly executed at the time of the news release it is a sign of fraud by the broker
Slippage is a logical fact in the news release. This is true for all stock markets and it arises because of the large preponderance of buyers or sellers. Agree, who will buy, for example, the pound sterling after the outcome of the June referendum in the UK if it goes down rapidly? The absence of those who satisfy application — is the reason for the slippage and the broker has absolutely nothing to do with it.
You need to learn how to trade on demo account and then go to real account
This myth about Forex trading is repeated often by novice traders. Demo account is for testing strategy, Expert Advisor, training of trading with technical indicators, but not for studying. A demo account allows you to get acquainted with the trading terminal, to get used to working with the broker, but only the real trade is able to teach something. Forex trading is 50% knowledge and 50% emotional, and psychological stability. And believe me, when trade is conducted on real (!!!) money, attitude to risk and opening positions is completely different than when there is no liability for potential loss.
The myth of Forex trading is just made up by brokers, who lure novice traders by the apparent simplicity of earning. No copying deals of successful traders, no trading advisors are able to give 100% result for the following reasons:
all expert advisors, as well as strategies are tailored to specific events and do not take into account speculative market situation or force majeure. Advisors are the algorithms written by the people themselves. And cannot be used as the primary tool;
people who blindly use EA or copy trade without understanding are like the chess player who moves the pieces on the board automatically just because it is written in the book. This is a direct way to loss;
copying of trades is a guarantee of loss, because it is impossible to enter the market at the same time as there is no guarantee the simultaneous operation of orders. But to grasp the essence of strategy, who are the leaders of the social trading is possible and even necessary.
The more indicators, the better
No. The efficiency of the system does not depend on its complexity. You can earn with simple strategies with 2 indicators as you can think of a complex system with many variables and hedging trading signals and expert advisors. Everyone chooses himself, but you can earn using simple strategies, as well as complex ones. Add: the more indicators, the less the input signal.
And finally, the last myth about Forex trading: Forex is easy. To see how much Forex is difficult, read the sections of our website “Trading Strategies” or “Forex brokers news”. Our portal is intended to simplify trade in Forex for you, but treat it as a complex work. Forex trading is a continuous perfection of own experience, knowledge and emotional stability.
Good luck in your trading!